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Tesla slips as U.S. regulator opens probe into Model Y cars
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Occidental rises as Buffett's Berkshire boosts stake to 22.2%
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Private payrolls stronger than expected in February
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Indexes: Dow off 0.24%, S&P up 0.11%, Nasdaq climbs 0.32%
By Bansari Mayur Kamdar and Shristi Achar A March 8 (Reuters) - The S&P 500 edged up on Wednesday after Federal Reserve Chair Jerome Powell did not commit to a 50 basis point rate hike in March, but strong labor market readings supported views that the U.S. central bank will stick to its hawkish policy for longer. Fed officials have not yet made a call on the size of the rate increase they are almost certain to deliver at their upcoming policy meeting, Powell told a House panel as part of testimony on the economy and monetary policy. U.S. stock indexes tumbled more than 1% on Tuesday and the S&P 500 logged its biggest percentage decline in two weeks, after Powell told U.S. lawmakers the Fed would likely need to raise rates more than expected in response to strong data. Data on Wednesday showed U.S. private payrolls increased more than expected in February, pointing to continued labor market strength ahead of the all-important nonfarm payrolls report on Friday.
Another set showed U.S. job openings decreased to a greater-than-expected 10.82 million in January and data for the prior month was revised higher. "We are still looking at a situation where the labor market is still very tight," said Matt Stucky, senior portfolio manager at Northwestern Mutual Wealth Management. "The Fed is pretty clear that they want to see some slack in the labor markets." Markets have started to price in a higher peak rate in the face of data showing that the economy is faring better than expected despite aggressive interest rate hikes over the last year. Traders see a nearly 70% chance that the U.S. central bank will raise rates by 50 basis points later this month, up from 23% before Powell's comments on Tuesday. Growth stocks such as Apple Inc and Nvidia Corp gained as U.S. Treasury yields fell, with the two-year easing slightly from its highest level in nearly 16 years. The Philadelphia SE Semiconductor index jumped 2%. At 11:42 a.m. ET, the Dow Jones Industrial Average was down 78.84 points, or 0.24%, at 32,777.62, the S&P 500 was up 4.46 points, or 0.11%, at 3,990.83, and the Nasdaq Composite was up 36.67 points, or 0.32%, at 11,567.01. Tesla Inc slid 3.3% after the U.S. auto safety regulator said it was opening a preliminary investigation into 120,000 Model Y 2023 vehicles following reports about steering wheels falling off while driving. Occidental Petroleum Corp gained 1.2% after Warren Buffett's Berkshire Hathaway Inc increased its stake in the oil company to about 22.2%. Advancing issues outnumbered decliners by a 1.24-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.04-to-1 ratio on the Nasdaq. The S&P index recorded two new 52-week highs and 11 new lows, while the Nasdaq recorded 29 new highs and 117 new lows. (Reporting by Sruthi Shankar and Bansari Mayur Kamdar in Bengaluru, additional reporting by Amruta Khandekar Editing by Vinay Dwivedi and Sriraj Kalluvia)
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